• Thatch raises $40M Series B led by Index Ventures, bringing total funding to $84.5M.
  • The platform enables employers to offer ICHRA, giving employees choice in healthcare spending.
  • The company has grown to serve 1,000+ businesses with 8x year-over-year revenue growth.

Thatch, a San Francisco-based startup transforming employer-sponsored healthcare, has secured $40 million in Series B funding to expand its platform that gives employees more control over their health benefits.

Index Ventures led the round with participation from existing investors Andreessen Horowitz, General Catalyst, SemperVirens, PeopleTech Partners, The General Partnership, and newcomer ADP Ventures.

The investment brings Thatch's total funding to $84.5 million since its 2021 inception, with a valuation reportedly three times higher than its Series A round just 14 months ago.

Thatch's platform helps employers implement Individual Coverage Health Reimbursement Arrangements (ICHRA), a relatively new health insurance option that became available in 2020.

Unlike traditional health benefits, where employers select a one-size-fits-all plan, ICHRA allows companies to provide employees with tax-free funds to purchase their preferred health insurance plans.

"It makes no sense for healthcare to be dependent on your employer," said Adam Stevenson, Thatch co-founder and president. "ICHRA allows businesses to give their employees tax-free money to spend on healthcare in the way that works best for them."

Through Thatch's marketplace, employees can select their preferred medical, dental, and vision plans.

The company also provides a debit card for accessing remaining funds, which about half of users maintain—averaging $250 monthly—to cover costs insurance doesn't.

Co-founders Stevenson and CEO Chris Ellis bring complementary experience from Humana, Stripe, and healthcare technology companies. They've since built a team of 72 employees, recently hiring former UnitedHealthcare Pacific Northwest CEO Gary Daniels as chief growth officer.

The startup has integrated with QuickBooks and is developing a similar offering for ADP.

Since launching in August 2023, Thatch has onboarded over 1,000 companies, including Dave's Hot Chicken, Jersey Mike's, and Ferry Health, with revenue growing eightfold year-over-year.

Edited by Annette George